BEFORE THE
POSTAL RATE COMMISSION
WASHINGTON,
D.C. 20268-Oos):p
PosTAL.
RATE
AND
‘RECEIVE11
,, J 43 PM ,97
Docket No. R97-1
FEE CHANGES, 1997
RESPONSE OF UNITED STATES POSTAL SERVICE
WITNESS BARON TO INTERROGATORY
OF
MAGAZINE PUBLISHERS OF AMERICA
(MPA/USPS-T17-l-7)
The United States Postal Service hereby provides the response
Baron to the following
USPS-T17-l-7,
interrogatory
of Magazine
filed on August 21, 1997.
of witness
Publishers of America:
Interrogatories
8 through
MPAI
12 have beeIn
redirected.
The interrogatory
is stated verbatim and is followed by the response
Respectfully
submitted,
UNITED STATES POSTAL
By its attorneys:
Daniel J. Foucheaux, Jr.
Chief Counsel, Ratemaking
MY&v
Richard T. Cooper
475 L’Einfant Plaza West, S.W.
Washington, D.C. 20260-l 137
(202) 268-2993;
Fax -5402
September 4, 1997
SERVICE
Response of Witness Baron to Interrogatories
of Magazine Publishers Of America
MPAIUSPS-Tl7-1.
Please refer to page 72, lines 16-18 of your testimony.
Please confirm that the only change in the rural carrier costing methodology from
that used to develop the FY 1996 Cost Segments and Components Report to the
one proposed in this case is “a modest change in this traditional volume variability
calculation. It proposes to no longer account for route reclassifications that occur
in response to large discrete volume and workload changes.” If not confirmed,
please explain all other changes proposed in this case to the rural carrier costing
methodology.
RESIPONSE:
Confiirmed in the sense that the change referred to in the section quoted from my
testimony is the only proposed change in the volume variability
calculation.
My
testimony on rural carriers is concerned solely with the issue of how to measure
volume-variable
costs, not with how volume-variable
costs should be distributed
to classes and subclasses of mail. I am unaware of any changes that may have
occulrred in the distribution procedure,
Response of Witness Baron to Interrogatories
of Magazine Publishers Of America
MPA/USPS-T17-2.
Please refer to Fiscai Year 1996 Cost Segments and
Components and Base Year 1996 Cost Segments and Components.
(a) Please confirm that the Periodical class share of rural carrier attributable
costs from the FY 1996 Cost Segments and Components is 9.:3 percent.
(b) Please confirm that the Periodicals class share of rural carrier attributable
costs from the Base Year 1996 Cost Segments and Components is 10.4
percent.
RESiPONSE:
(a) Confirmed
(b) Confirmed.
2
Response of Witness Baron to Interrogatories of Magazine Publishers Of America
MPAJUSPS-T17-3.
Please confirm that, according to your testimony, each class
and :subclass of mail should receive the same percentage of BY 1996 volumevaria,ble rural carrier costs as it rec:eived under the previous costing methodology.
If not confirmed, please explain, and provide all relevant data.
RESPONSE:
Not confirmed.
My testimony does not address the issue of how volume-variable
rural carrier costs should be distributed to classes and subclasses
3
Response of Witness Baron to Interrogatories
of Magazine Publishers O’f America
MPPJUSPS-T174.
If you were able to confirm MPA/USPS-T17-2
explain how both statements can be true.
RESPONSE:
Not applicable.
T17-2 is confirmed, but T17-3 is not confirmed.
4
and 3, please
Response of Witness Baron to Interrogatories
of Magazine Publishers Of America
MPAlUSPS-T17-5.
Please confirm that, all else being equal, if the volume
variability of the time taken to deliver a letter is less than 100 percent, as the
number of pieces delivered by a rural carrier increases, the average time that the
carrier spends to deliver a letter should decrease.
RESPONSE:
Confirmed.
Note, however, that in the rural carrier analysis, the timle taken to
delivler a letter is defined as the evaluation factor of 0.0791 minutes per letter
delivlered.
delivered
This time allowance factor does not change as the number of letters
increases.
Therefore, the volume variability of just the time that is taken
to deliver a letter with respect to the number of letters delivered is 100 percent.
is only the volume variability of total rural carrier time spent over all activities
combined
that is less than 100 percent, due to the presence of tixeld evaluation
factors.
5
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It
Response of Witness Baron to Interrogatories of Magazine Publishers Of America
MPAlUSPS-T17-6.
Please confirm that, all else being equal, if the number of
letters delivered on an average rural carrier route increases between revisions of
the evaluation factors, and the volume variability of the time taken to deliver a
letter is less than 100 percent, the evaluation factor for delivering a letter should
decrease from the earlier revision to the latter revision,
RESPONSE:
Confirmed, with the qualification that the volume variability of time taken just to
deliver letters with respect to number of letters delivered on rural routes has not,
to my knowledge, ever been estimated.
If the volume variability of just the time
that is taken to deliver a letter with respect to letters delivered is indeed less than
100 percent, then each increase of one new letter delivered will reqiuire a smaller
increase in letter delivery time than did the previous increment of one letter
delivered.
This declining marginal delivery time would mandate a c,orresponding
reduction in the evaluation factor for delivering a letter.
6
Response of Witness Baron to Interrogatories of Magazine Publishers Of America
MPPJUSPS-T17-‘7. Assume for p,urposes of this question that rural carriers are
paid in the same way that city carriers are paid.
a. Do you believe that the volume variability for delivery of a piece of mail of a
particular shape should be simlilar for a rural route and for a curbside city
route? Please explain your response.
b. If no to a., do you believe that the volume variability for delivery of a piece of
mail of a particular shape should be higher or lower for a rural mute than for a
curbside city route? Please explain your response.
RESPONSE:
First,, it should be noted that rural carriers are not paid in the same way that city
carriers are paid.
a. Yes. Rural routes are operationally
similar to curbline city routes. Both
primiarily serve single delivery residential stops. Both have lower access costs
per delivery than do foot and park 8 loop city routes.
Moreover, if rural carriers
are paid in the same way as city carriers are paid, then, presumably, the same
methodologies
currently used to measure city carrier volume variabilities would
also be applied to rural routes.
In particular, rural carrier costs would be split into
load.-time, running time, and street support components,
and running time costs
would be further split into fixed route time and access time. The volume
varialbilities of the load time and alccess time on the rural routes would. in this
case, be similar to those on curbli,ne city routes.
Furthermore, the ,volume
varialbilities for street support costs would also be similar, since these would be
based on the load and access variabilities.
b. Not applicable
7
DECLARATION
I, Donald M. Baron, declare under penalty of perjury that the foregoing answers
are true and correct, to the best of my knowledge,
Dated:
v-4--97
-
information, and belief.
CERTIFICATE
OF SERVICE
I hereby certify that I have this day served the foregoing
participants
of record in this proceeding
in accordance
document
with section 12 of the Rules
of Practice.
&7L
Richard T. Cooper
475 L’Enfant Plaza West, SW,
Washington, DC. 20260-l 137
September 4, 1997
upon all
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